Oil & Gas Stock Roundup: Who Needs OPEC?
-
Upload
the-motley-fool -
Category
Economy & Finance
-
view
6.669 -
download
0
Transcript of Oil & Gas Stock Roundup: Who Needs OPEC?
Oil barely budged this week, closing down less than 2% and just below $48.50 per barrel.
That was actually a surprisingly tame response to another failed OPEC meeting, after the organization couldn't come to an
agreement on a production ceiling. OPEC's failure didn't seem to faze oil stocks, many of
which rallied sharply this week.
So What: Key driver: Closing its equity
offering In early May, Enerplus launched a
C$200 million equity offering, agreeing to sell more than 33 million shares at C$6.90 per share
The company intended to use that cash to reduce debt under its bank credit facility, fund capital expenditures, and for general corporate purposes
Now What: The deal finally closed this week,
with underwriters also exercising the full over-allotment option
That yielded C$230 million in gross proceeds for Enerplus, which gives it the cash it needed to strengthen its balance sheet
Key takeaway: With its balance sheet much improved, investors are buying into Enerplus’ ability to make it through the downturn
So What: Key driver: Oil and credit
market improvements Weakening oil and credit
markets caused Capital Product Partners to significantly reduce its distribution in order to create a capital reserve for future debt repayment
Now What: However, with oil prices rising
it has started to thaw the credit markets
This could open the door not only for Capital Product Partners to refinance its debt, but it could also open up new opportunities
Key takeaway: Investors are starting to see some positives for Capital’s future
So What: Key driver: Follow through from last
week’s capex and restructuring update
EXCO continued to rally this week after announcing an updated capex budget as well as its progress on restructuring debt
Investors were particularly pleased with the company’s progress on debt reduction, with its net debt now down to $1.1 billion, which has decreased 28% since last September
Now What: Moreover, investors are
relieved to see that the company has $250 million in liquidity and only expects to burn through $10 million a month this year
Key takeaway: Investors continue to buy into EXCO’s turnaround plan
So What: Key driver: Its merger partner
appears finally willing to renegotiate
Energy Transfer has been engaged in a rather bitter battle with merger partner Williams Companies over the terms of their proposed merger
It is a deal that ETE refuses to close under its current terms
Now What: Williams has refused to
renegotiate, instead suing ETE due to alleged contract breaches
However, according to recent reports Williams has had a change of heart and is open to considering a new offer
Key takeaway: Investors see this newfound openness as a sign that the deal could still be closed but at more favorable terms
So What: Key driver: Earnings
follow-through and an analyst upgrade
After an initial post-earnings sell-off, NGL Energy Partners rallied sharply this week
Now What: Fueling the buying was the fact
that investors liked the company’s liquidity enhancements and the re-iteration of its 2017 guidance
Those factors also led analysts at Stifel to upgrade the company from hold to buy
Key takeaway: Investors are starting to believe that the worst is over for NGL Energy Partners
This could be the next billion-dollar iSecret